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    Published on: August 25, 2005

    The New York Times had a terrific piece yesterday about Middlebury College in Vermont, where the administration “has replaced ‘mystery meat,’ canned vegetables and other institutional menu staples - the butt of freshman-year jokes for generations - with locally raised chicken and lamb, and heirloom tomatoes, emerald green broccoli and plump ripe strawberries grown within a few miles of the campus.”

    While most schools continue to serve mass produced food, the NYT writes that “officials at more than 200 universities and 400 school districts are supporting a farm-to-cafeteria movement to build their menus around fresh local ingredients. And students are cheering instead of complaining.”

    The Times notes that schools making this transition often find that food costs “are higher, supplies can be hard to find and it takes more money to pay qualified cooks and install working kitchens.” At the same time, supporters say there are larger advantage and benefits, “from fighting obesity among the young to helping the local economy.”
    KC's View:
    This is what higher education ought to be about – teaching kids to be better, smarter consumers on a wide variety of levels.

    As a society, we seem to accept the argument that “kids like to eat junk food,” and that the best we can do is encourage personal responsibility.

    But we can’t expect people to make intelligent, informed decisions without giving them context for those choices. In the case of food, that means, for example, offering salads made from heirloom tomatoes and fresh mozzarella instead of junk food…

    We refuse to accept the argument that kids won’t eat this stuff. We expect too little from our kids, and then pass off our own lack of standards as their lack of discipline.

    Published on: August 25, 2005

    Dow Jones reports that Pepperidge Farm plans to highlight taste in its advertising for its new line-up of breads, English muffins, bagels and croutons, as well as a whole-grain version of its popular Goldfish Crackers.

    While the company is hardly the first to get into the whole grain business because of consumers’ nutrition concerns - Dow Jones notes that “the number of whole-grain product introductions in the U.S. more than doubled to 313 in 2004 from 152 in 2003,” and is expected to grow again this year – it is a little unusual for a company to emphasize taste in its marketing of these items as opposed to health.

    But Pepperidge Farms believes that consumers understand the health implications of switching to whole grain, and now simply have to be convinced that it is a great-tasting alternative. At the same time, the goal is to grow this side of the business without cannibalizing existing sales, and without creating the impression that there is something wrong with the existing line of products.
    KC's View:
    While the company certainly has to be careful about continuing to nurture its existing product lines, we think anything that gives consumers a choice about such things is a positive step.

    As a 50-year-old guy who is trying to convert to as many whole grain products as possible, we applaud these new product lines and will be seeking them out in stores.

    Published on: August 25, 2005

    The Wall Street Journal reported that “taking a cue from the nation's auto makers, a widening variety of retailers are extending coveted ‘employee discounts’ to all shoppers. Stores selling everything from computers to golf clubs are holding sales offering consumers the same price cuts they once reserved exclusively for their workers.

    The upside of the promotions seems to be that the allure of an “employee only” discount is believed to encourage consumers to buy more than they ordinarily do, and the sales generally are replacing end-of-season sales that would have taken place anyway. But there is a downside – angering employees who used to think that their deep discounts made them special.
    KC's View:
    Actually, we take the somewhat contrarian position that offering employee discounts to consumers is a surpassingly dumb idea – especially in the auto industry. While the promotion certainly has moved its share of cars, we wonder what the exit strategy is – once the promotion is over, if any shopper walks into a Ford dealership, it seems to us that any price higher than the employee price might be deemed too high.

    The American car companies that have taken this approach have made it about price, not value, not quality.

    It isn’t a coincidence that while the US car companies were embarking on this strategy, Toyota raised its prices – as if to say, “If you want a better car, you’ll find it here.”

    The foolishness of the “employee pricing” strategy may be less striking in other venues, but we think that it leaves the retailer with nowhere to go when the sale is over…and it is the retailer’s own fault.

    Published on: August 25, 2005

    • In Canada, the Quebec Superior Court has ruled that the Quebec Labor Relations Board was correct when it allowed the unionization of a Wal-Mart store in St-Hyacinthe.

      The retailer had sought to include a great number of employees in the unionization vote, apparently believing that a larger sampling would have been anti-union.

      It doesn’t really matter though. After the vote in favor of unionization, Wal-Mart closed the store, calling it unproductive.

    • USA Today notes this morning that Wal-Mart seems to trying a lot of different ideas lately as it stretches its marketing wings. There is the exclusive deal with Garth Brooks that eventually will make it the only retailer carrying his catalog of albums; the decision to take out a multi-page fashion advertisement in the September Vogue; the decision to host a fashion show next month during Fashion Week in New York City; and now, a deal with the group Destiny’s Child for a holiday promotion.

      "We're looking to align with partners that are relevant to our customers,” Wal-Mart CMO John Fleming tells USA Today.

    KC's View:
    Not only is Wal-Mart looking for partners relevant to its existing and potential customers, but we expect that you’ll see marketing and merchandising approaches that don’t just make Wal-Mart seem hipper than expected, but also more relevant to people’s lives than some might think. That’s a smart move.

    We’re not surprised by the focus on fashion. Years ago – and we wrote about it on MNB at the time – Julie Lyle (who used to be with the company’s international division, and now is Wal-Mart’s vice president for corporate marketing, advertising and administration) spoke at the annual and always excellent Portland State University Food Industry Leadership Center conference, and talked persuasively about how the company’s own-label George line of clothing in the UK was both a great deal and attractive, relevant fashion.

    Anybody who thought that Target would just be able to dominate the supercenter/discounter fashion debate was just foolish…because Wal-Mart doesn’t just let anyone else dominate anything. (If more retailers had that sense of aggression, the retailing world would be a more interesting place.)

    A question, though. (And don’t accuse us of being a “glass half empty” kind of person.

    Isn’t Destiny’s Child disbanding? (And is it the best kind of message for Wal-Mart to send that it has deals with a country singer who doesn’t record or tour, and a group that has decided not to sing together anymore?)

    Just asking.

    (Actually, our kids would probably be surprised that we even know what Destiny’s Child is…)

    Published on: August 25, 2005

    Convenience store chain 7-Eleven announced yesterday that it is launching a private label line of functional foods and beverages with the name “Formula 7.”

    The line, according to the company, “includes bottled and canned beverages, as well as two nutritional bars, each designed specifically to enhance energy, fitness or endurance” and “fortified with vitamins, minerals, herbs, antioxidants, amino acids and other natural ingredients” that are believed to have be both beneficial to health and to help prevent disease.

    "Consumers are looking for ways to improve their health whether it's changing their diet, lifestyle or looking to vitamin supplements," said Debbie Wildrick, 7-Eleven’s product director for processed foods. "Formula 7 provides a great platform for us to develop additional items with specific attributes to enhance energy, endurance, wellness, strength and maybe more."

    The company notes that “functional and fortified foods and beverages are the top-selling category of packaged consumer health and wellness goods, with sales reaching $23.4 billion in 2004,” and are expected to “the most successful healthy food products through 2009.”
    KC's View:
    As far as we’re concerned, the ultimate convenience is remaining functional (not to mention alive) as long as possible.

    This is smart marketing by 7-Eleven, because it helps the company move into a fast-growing niche and does so in a way that differentiates it in the marketplace.

    Published on: August 25, 2005

    The Chicago Tribune writes that new legislation in Illinois has assured that “Illinois has one of the most civilized restroom-access laws in the country.”

    The paper writes: “Called ‘Ally's Law,’ the unanimously supported legislation requires businesses to make employee-only restrooms available to people with irritable-bowel disorders and other medical conditions such as pregnancy and incontinence. Ally's Law makes exceptions for businesses with fewer than three employees on duty (such as gas station kiosks) and restrooms in locations that would pose an ‘obvious safety risk’ to the customer.

    “No special identification cards are required, and businesses that don't cooperate could be fined $100.”
    KC's View:
    Well, excuse us. But we can’t imagine why any retailer of a certain size wouldn’t just have restrooms open and available for customers with medical conditions, but all customers. It just makes sense.

    We’ve said it before, and we’ll say it again.

    You usually can tell a lot about a retailer from the quality and cleanliness of its rest rooms.

    Published on: August 25, 2005

    The US Department of Agriculture (USDA) has reversed a previous decision and will continue to allow appropriate cosmetics to carry the "USDA Organic" seal.

    The label was created by USDA three years ago, and was applied to food and other items grown without pesticides and made with all-natural products. But the agency decided earlier this year that since it didn’t regulate the cosmetics industry, it couldn’t allow those companies to carry the label.

    USDA was then sued by an organic soap company and a consumer group, and now has backed down, allowing the label to be carried on cosmetics packaging if the product meets USDA standards.
    KC's View:

    Published on: August 25, 2005

    • Pathmark Stores named John T. Standley to be the company’s new CEO, succeeding Eileen Scott, who is leaving the company after three decades of service.

      Standley is the former CFO of Rite-Aid. Reports are that Standley has a longtime relationship with Yucaipa Cos., which invested $150 million in Pathmark earlier this year

      At Rite Aid, Kevin Twomey, the company’s senior vice president/chief accounting officer, has been named acting CFO, effective immediately.

    KC's View:

    Published on: August 25, 2005

    • Dollar Tree reported that its second quarter profit fell to $27.3 million, from $29.6 million during the same period a year earlier. Quarterly sales rose 9.2 percent to $769.0 million, but same-store sales were off 1.5 percent.

    KC's View:

    Published on: August 25, 2005

    Responding to yesterday’s piece analyzing a three-part Chicago Tribune piece profiling the Oreo - using the popular cookie as both metaphor and illustration of changing trends in American foods, the evolving tastes of the American consumer, and the continuing challenges to companies making money in the snack food business – one MNB user wrote:

    First it was tobacco companies creating ads to tell us not to smoke!

    Then it was McDonalds getting sued for making us too fat!

    Now it's the press leveraging the obesity issue to attack food companies about the unhealthiness of eating too many of their products!

    Are we really that irresponsible as a nation that we need to blame the others for our lack of good judgment?

    I know when I walk into Dylan’s Candy Shop in NYC and step up to the M&M’S COLORWORKS display that I really shouldn’t try to eat all of those M&M’S. Have we all turned into Augustus from Willy Wonka?

    One of the most telling lines of human behavior comes from Tommy Lee Jones’ character Agent K in Men in Black, when he said that people as individuals are smart but the human race as a whole is dumb. I’d like us to prove him wrong.

    In all of the articles I have read regarding the issue of obesity there is one line that, while included, is usually at the end (and hidden in a part of the article most don’t ever get to). That is the part that talks about MODERATION. I remember having to sit through my freshman year of high school home economics class where Mrs. Cynthia George told us time and time again that healthy eating is about moderation and self control. This is not rocket science people...its about our health and our bodies. Fighting obesity is a personal choice we all need to make and a responsibility we have to ourselves. To suggest that there are not options for us out there is just plain wrong...You always have the option of moderation...Just eat less!

    Don’t get me wrong...I am a native of the south side of Chicago where an appetizer for a steak dinner is chomping on a few grilled bratwurst beforehand. So clearly I am not the epitome of health, but I have learned that the only one to blame for me being overweight is me and the only one that has the power to change that is me. That goes for my 1-year old daughter too...It is my responsibility as a parent to teach her moderation and healthy eating habits, not some brand manager or corporate executive.

    So come on people...lets stop pressuring manufacturers to focus on addressing this nation’s obesity problem and allow them to focus their efforts on delivering products that we need, when we need them and how we need them. Lets let the Kraft’s of the world focus on understanding us personally to develop products, packs, placement, promotions and pricing that benefit us in very personal ways.

    In a capitalist society all you have to do is stop supporting the products and companies you don’t like. If you don’t think that approach works, explain why retailers like Whole Foods and Trader Joe’s are so successful?

    We have a problem with your logic.

    Isn’t one way of exercising personal responsibility to pressure manufacturers to create products that address the nation’s obesity problem?

    We think it is – no pun intended – healthy that there are 40 different kinds of Oreos. Maybe not so much for brand equity, but having a wide variety of products that meet different health profiles seems smart to us.

    Another MNB user wrote:

    Got a chuckle about the 'Oreo theory' expressed by the Chicago Tribune. Oreos have been around for decades and linking this great cookie to the obesity problem in the States is a stretch - at best.

    When the Oreo was introduced and for many years, it was a snack cookie, AGAINST a backdrop of kid playing outdoors instead of in front of a video game or PC, when breakfast cereals were dominated by Wheaties, Cheerios, with the sweetest being Frosted Flakes (as opposed to, say, Reeses Breakfast cereal).

    I remember ads aimed at me (when I was a kid) for Oreos, Drakes Cakes, Twinkies, etc.

    McDonalds was present, but not omnipresent and most meals were cooked in the home, rather than bought in the Drive-Thru.

    Short version is that focusing on the Oreo omits all of the major contributing factors to the obesity problem in the States.

    The answer to the obesity problem is in the mirror - it's based on behaviors and eating habits. If everyone in the States stopped eating the Oreo, it would make no difference regarding our obesity problem.

    Maybe we just read the article differently. We don’t think the Tribune was trying to blame obesity on Oreos – just use a single cookie as an example of how the culture has changed, how priorities are shifting, and how company is trying to keep up with it all.
    KC's View: